UAL Stock Falls on Report of Blow to Buyout
CHICAGO — UAL Corp. stock fell sharply Monday following a report that Chemical Banking Corp. has pulled out of the group of five banks that are interested in financing a planned $4.4-billion employee buyout of the Chicago-based airline company, traders said.
UAL fell $6.125 to $156.875 a share on the New York Stock Exchange following reports that Chemical Bank had withdrawn temporarily as a possible lender because of concerns about the proposal’s lack of cash financing.
According to a report in Monday’s Wall Street Journal, Chemical Bank has withdrawn as one of five lead banks for the buyout.
A spokeswoman for Chemical Bank declined to comment on the report.
Chemical was one of five banks that expressed interest in becoming lead lenders for the buyout, which faces an Aug. 9 deadline for financing the $201 a share offer.
Stephen Dexter of Kemper Financial Services, Inc., an industry analyst, said the other four lenders also had similar concerns. “You’re coming down to D-day here and you’ve got one of the biggest participants in the deal saying, ‘We don’t like it,’ ” Dexter said in a telephone interview.
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